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MND announces changes to Lease Buyback Scheme
September 3rd, 2014 | Author: Editorial
http://www.tremeritus.com/2014/09/03/mnd-announces-changes-to-lease-buyback-scheme/
HDB flats
MND & HDB announced 4 enhancements to the Lease Buyback Scheme (LBS) today (3 Sep). The enhancements will avail the LBS to more elderly households, and provide greater flexibility to suit different preferences and needs, MND said.
1. Extension to 4-room HDB flats
As announced by PM Lee in the recent NDR, LBS will be extended to 4-room HDB flats. With this extension, the LBS will cover 75% of elderly HDB households compared to 35% currently. 4-room households will receive a $10,000 cash bonus per household when they participate in the LBS. This is on top of the proceeds they receive from selling the tail-end lease of their flat to HDB.
2. Income ceiling for participating in LBS raised to $10,000
The income ceiling for participating in the LBS will be raised to $10,000, from $3,000 per month. The income ceiling for the Silver Housing Bonus (SHB) scheme will be raised from $3,000 to $10,000 correspondingly. The increase in income ceiling will allow elderly who are still working and/or living with their family members to qualify for these monetisation options.
3. Requirement relaxed for households with 2 or more owners to top up their CPF Retirement Accounts with LBS proceeds
The requirement for households with two or more owners to top up their CPF Retirement Accounts (RA) with the LBS proceeds will be relaxed. Currently, about half of the LBS-eligible households have two or more owners. For these households, each owner will only be required to top up his or her CPF RA to half the age-adjusted prevailing CPF Minimum Sum (MS), instead of the full age-adjusted prevailing MS currently. They will be able to retain more cash upfront from participating in the LBS. HDB will retain the $100,000 cap on the household’s cash proceeds by requiring owners to top up the excess of $100,000 into their respective CPF RAs.
The relaxation in the CPF top-up requirement will provide greater flexibility to joint owners to decide how much of the LBS proceeds to retain upfront in cash vis-à-vis disbursed in a monthly income stream. With this relaxation, they can choose to retain more in cash. Alternatively, they can decide to use the cash proceeds to further top up their own CPF RA or the CPF RA of their spouse, beyond the minimum required up to the prevailing MS to get higher payouts under CPF LIFE.
4. Flexibility to choose length of lease to retain
Elderly households will have the flexibility to choose the length of lease to retain, based on their age and preferences, instead of having one standard 30-year lease for all. Those aged 70 to 74 will have the option of a 25-year lease, those aged 75 to 79 will have the option of a 20-year lease, and those aged 80 or older will have the option of a 15-year lease. On the other hand, those who prefer longer leases can choose to retain more than the minimum required for their age, in 5-year increments, up to a maximum of 35 years. Any unconsumed lease will be refunded to the owner’s estate. A household must have at least 20 years of lease to sell to HDB to be eligible for the LBS.
The new LBS after the enhancements is summarised at Annex.
MND said the enhancements to the LBS were made “in response to feedback received during the Our Singapore Conversation” on Housing.
MND also said that about 290,000 HDB flats are now owned by Singaporeans aged 55 or older; 80% of these flats are fully paid up, with no outstanding mortgage loan.
Other than LBS, MND said that elderly have other options to monetise their housing asset for retirement:
a) renting out a room
b) renting out the whole flat and moving in with their children
c) selling their flat and moving to a smaller flat or Studio Apartment with the option of the SHB
“The LBS provides one option for the elderly to monetise their HDB flat to supplement their retirement income, while continuing to age in place in their own home,” MND said.
These changes to the LBS and SHB will come into effect on 1 April next year. In the meantime, the LBS will continue to be available to eligible elderly households in 3-room or smaller flats under existing terms until the changes are implemented.
September 3rd, 2014 | Author: Editorial
http://www.tremeritus.com/2014/09/03/mnd-announces-changes-to-lease-buyback-scheme/
HDB flats
MND & HDB announced 4 enhancements to the Lease Buyback Scheme (LBS) today (3 Sep). The enhancements will avail the LBS to more elderly households, and provide greater flexibility to suit different preferences and needs, MND said.
1. Extension to 4-room HDB flats
As announced by PM Lee in the recent NDR, LBS will be extended to 4-room HDB flats. With this extension, the LBS will cover 75% of elderly HDB households compared to 35% currently. 4-room households will receive a $10,000 cash bonus per household when they participate in the LBS. This is on top of the proceeds they receive from selling the tail-end lease of their flat to HDB.
2. Income ceiling for participating in LBS raised to $10,000
The income ceiling for participating in the LBS will be raised to $10,000, from $3,000 per month. The income ceiling for the Silver Housing Bonus (SHB) scheme will be raised from $3,000 to $10,000 correspondingly. The increase in income ceiling will allow elderly who are still working and/or living with their family members to qualify for these monetisation options.
3. Requirement relaxed for households with 2 or more owners to top up their CPF Retirement Accounts with LBS proceeds
The requirement for households with two or more owners to top up their CPF Retirement Accounts (RA) with the LBS proceeds will be relaxed. Currently, about half of the LBS-eligible households have two or more owners. For these households, each owner will only be required to top up his or her CPF RA to half the age-adjusted prevailing CPF Minimum Sum (MS), instead of the full age-adjusted prevailing MS currently. They will be able to retain more cash upfront from participating in the LBS. HDB will retain the $100,000 cap on the household’s cash proceeds by requiring owners to top up the excess of $100,000 into their respective CPF RAs.
The relaxation in the CPF top-up requirement will provide greater flexibility to joint owners to decide how much of the LBS proceeds to retain upfront in cash vis-à-vis disbursed in a monthly income stream. With this relaxation, they can choose to retain more in cash. Alternatively, they can decide to use the cash proceeds to further top up their own CPF RA or the CPF RA of their spouse, beyond the minimum required up to the prevailing MS to get higher payouts under CPF LIFE.
4. Flexibility to choose length of lease to retain
Elderly households will have the flexibility to choose the length of lease to retain, based on their age and preferences, instead of having one standard 30-year lease for all. Those aged 70 to 74 will have the option of a 25-year lease, those aged 75 to 79 will have the option of a 20-year lease, and those aged 80 or older will have the option of a 15-year lease. On the other hand, those who prefer longer leases can choose to retain more than the minimum required for their age, in 5-year increments, up to a maximum of 35 years. Any unconsumed lease will be refunded to the owner’s estate. A household must have at least 20 years of lease to sell to HDB to be eligible for the LBS.
The new LBS after the enhancements is summarised at Annex.
MND said the enhancements to the LBS were made “in response to feedback received during the Our Singapore Conversation” on Housing.
MND also said that about 290,000 HDB flats are now owned by Singaporeans aged 55 or older; 80% of these flats are fully paid up, with no outstanding mortgage loan.
Other than LBS, MND said that elderly have other options to monetise their housing asset for retirement:
a) renting out a room
b) renting out the whole flat and moving in with their children
c) selling their flat and moving to a smaller flat or Studio Apartment with the option of the SHB
“The LBS provides one option for the elderly to monetise their HDB flat to supplement their retirement income, while continuing to age in place in their own home,” MND said.
These changes to the LBS and SHB will come into effect on 1 April next year. In the meantime, the LBS will continue to be available to eligible elderly households in 3-room or smaller flats under existing terms until the changes are implemented.
